TOSCANA ENERGY ANNOUNCES ACQUISITION OF CORTONA ENERGY LTD.

July 23, 2018 – Toscana Energy Income Corporation (“Toscana” or the“Company”) (TSX: TEI)is pleased to announce that further to its news release dated June 14, 2018, the Company has entered into a share purchase agreement (the “Agreement”) to acquire 100% of Cortona Energy Ltd. (“Cortona”) for aggregate consideration of approximately $12,000,000.00 subject to customary closing conditions (the “Transaction”). In connection with the Transaction, the Company will acquire 100% of the Class A Shares and Class B Shares of Cortona for the aggregate price of $ $843,619.00, where the holders of Class A Shares will receive approximately $1.20 per Class A Share, and holders of Class B Shares will receive $1.00 in the aggregate for all of the Class B Shares. Furthermore, the Company will repay the current debt of Cortona that is evidenced by a note in the amount of $11,156,381.00 plus unpaid accrued interest and expenses. The repayment of the note will be satisfied by the payment of cash consideration in the amount of $8,000,000.00 plus $158,268.82 in respect of unpaid accrued interest and expenses up to the closing of the Transaction, and the issuance by the Company of a new secured subordinated note in the principal amount of $3,156,381.00 bearing interest at a rate of 9% per annum and repayable within two (2) years from the date of issuance.

On the basis of the recommendation by the special committee (the “Special Committee”) of the Board of Directors of the Company (the “Board”) that was established to consider the proposed Transaction, the Board unanimously determined (with directors who are conflicted, abstaining) that the Transaction is in the best interests of the Company, that the consideration payable by the Company pursuant to the Transaction is fair to the shareholders of Toscana, and recommends approval of the Transaction by disinterested shareholders of Company. The Special Committee is comprised of a member of the Board who is independent of Cortona.

The anticipated benefits of the Transaction include: (i) it will consolidate the Company’s large oil in place in the Carmangay Barons Oil Pool, adding approximately 250 BOEs/d of light oil production; (ii) it will consolidate operatorship of the Carmangay Barons Oil Pool; (iii) it will result in the Company’s working interest in the Carmangay Barons Oil Pool becoming in excess of 90%; (iv) it adds long life, low decline light oil reserves; (v) it will result in the current net combined production from the pool being approximately 450 BOEs/d; and (vi) oil weighting of the Company would increase from 36% to 46%.

In coming to its recommendation, the Board received a report from the Special Committee pursuant to which the Special Committee outlined the rationale for recommending the Transaction to the Board including (among other things) the following factors and benefits:

the anticipated benefits to the Company as described above;

that the total consideration payable by the Company for Class A Shares is within the range of the formal valuation prepared by Sayer (as defined below);

the support received by the Company’s senior lender for the Transaction;

advice from Sayer as to the fairness of the Transaction (from a financial point of view) to the shareholders of the Company;

consideration given to the risks associated with the completion and non-completion of the Transaction, including the risks inherent with the Company’s status quo situation.

In considering the Transaction the Special Committee received a fairness opinion from Sayer Energy Advisors (“Sayer”) which indicated that as at the date thereof and subject to the assumptions, limitations and qualifications contained therein, the consideration payable by the Company pursuant to the Transaction is fair, from a financial point of view, to the shareholders of the Company. The Special Committee also received a formal valuation of Cortona from Sayer, which determined a range of values for Cortona as at April 1, 2018. Subject to the assumptions, limitations and qualifications contained in the formal valuation and pursuant to the results of the formal valuation, the consideration payable by the Company pursuant to the Transaction is within the range of values for the common shares of Cortona as determined by Sayer. The fairness opinion and formal valuation will be included in the management information circular (the “Circular”) to be sent by mail to the shareholders of the Company on or about August 1, 2018 in connection with the approval of the Transaction.

Certain director, officers and former officers of the Company (being Donald D. Copeland, John Festival, Joseph S. Durante, Lew Hayes, Anand Ramnath and Glen Tanaka) are holders of Class A Shares of Cortona and are considered “related parties” of the Company under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). As such, the Transaction will constitute a “related party transaction” under MI 61-101 because it is a transaction in which the Company will acquire securities from “related parties” for valuable consideration. Accordingly, in accordance with MI 61-101, the completion of the Transaction is subject to, among other things, receipt by the Company of “majority of the minority” shareholder approval in accordance with MI 61-101.

Toscana shareholders as of the record date of July 20, 2018, will receive proxy voting materials (“Meeting Materials”) in advance of the Meeting (as defined herein) to vote by proxy or in person at a special meeting of Toscana shareholders (the “Meeting”) to be held August 22, 2018 at 10:00 a.m. (MDT) at the offices of Norton Rose Fulbright Canada LLP in Calgary, Alberta (3700, 400 – 3rdAvenue S.W.) to consider the Transaction.

The Meeting Materials will include the Circular that will contain, among other things, details concerning the Transaction, the reasons for and benefits of the Transaction, the risks associated with the Transaction, the requirements for the Transaction to become effective, voting at the Meeting, the Agreement, the fairness opinion and formal valuation and other related matters. Shareholders are urged to carefully review the Circular and accompanying materials as they contain important information regarding the Transaction.

Closing of the Transaction remains subject to a number of customary conditions, including shareholder approval and certain regulatory approvals including approval or acceptance by the Toronto Stock Exchange (the “TSX”). The Transaction is expected to close on or before August 31, 2018.

Cortona Background

Cortona was originally formed in the spring of 2016 by certain of the officers and directors of Toscana to preserve for Toscana a strategic opportunity to consolidate the Company’s core Carmangay Barons Oil Pool in southern Alberta. As disclosedin a news release of the Company dated November 25, 2015, Toscana had an opportunity to acquire the assets that were subsequently acquired by Cortona, however, the collapse of oil prices that began in 2014 and the considerable tightening of the credit and equity markets that followed prevented Toscana from acquiring the Cortona assets at that time.

About Toscana Energy Income Corporation

Toscana Energy Income Corporation is a conventional oil and gas producer with the mandate to acquire high quality, long life oil and gas assets including royalties, non-operated working interests and unitized production for yield and capital appreciation.

For further information, please contact:

Joseph S. Durante, Chief Executive Officer

Tel: (403) 410-6793

Fax: (403) 444-0090

BOE Equivalency

Barrel of oil equivalents or BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf: 1 bbl, utilizing a conversion ratio of 6 Mcf: 1 bbl may be a misleading indication of value.

Forward-Looking Statements:

This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. Forward‐looking statements and information are often, but not always, identified by the use of words such as “appear”, “seek”, “anticipate”, “plan”, “continue”, “estimate”, “approximate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe”, “would” and similar expressions.

More particularly and without limitation, this news release contains forward‐looking statements and information concerning the Transaction, the anticipated benefits arising therefrom and the ability of the Company to take realize such benefits, the mailing of the Meeting Materials to the shareholders of the Company and the expected timing associated therewith, the Meeting and the ability of the Company to receive in a timely fashion the required regulatory approvals including approval from the shareholders of the Company and approval or acceptance of the Transaction by the Toronto Stock Exchange. The forward‐looking statements and information are based on certain key expectations and assumptions made by management of the Company. Although management of the Company believes that the expectations and assumptions on which such forward looking statements and information are based are reasonable, undue reliance should not be placed on the forward‐looking statements and information since no assurance can be given that they will prove to be correct.

Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward‐looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to reserves, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions and failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. Accordingly, readers should not place undue reliance on the forward‐looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive.

The forward‐looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the TSX. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.